CHAPTER 369
SB 193 – FINAL VERSION
27Jan2010… 0311h
2010 SESSION
05/01
SENATE BILL 193
AN ACT relative to the interest rate on small loans and relative to the definition of lender for purposes of regulating such loans.
SPONSORS: Sen. Houde, Dist 5; Sen. Hassan, Dist 23; Sen. Janeway, Dist 7; Rep. Kurk, Hills 7; Rep. M. Smith, Straf 7; Rep. Butler, Carr 1; Rep. Almy, Graf 11
COMMITTEE: Commerce, Labor and Consumer Protection
This bill establishes a maximum interest rate on small loans of $10,000 or less. The bill also includes credit services organizations in the definition of lender for purposes of small loans, title loans, and payday loans.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
27Jan2010… 0311h
09-1013
05/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Ten
AN ACT relative to the interest rate on small loans and relative to the definition of lender for purposes of regulating such loans.
Be it Enacted by the Senate and House of Representatives in General Court convened:
369:1 New Subparagraph; Definition of Lender. Amend RSA 399-A:1, VIII by inserting after subparagraph (d) the following new subparagraph:
(e) Acts as a credit services organization as defined in RSA 359-D:2, II.
369:2 Maximum Charges on Small Loans. RSA 399-A:12, I and II are repealed and reenacted to read as follows:
I. For any closed-end loan in the amount of $10,000 or less, a lender may lend in money, goods, or things of value upon such security not forbidden by RSA 399-A:11, VIII as may be agreed upon, and in connection with any such loan, may contract for, exact, or receive, directly or indirectly, charges, whether for interest, compensation, brokerage, endorsement fees, consideration, expense, or otherwise, on the entire principal of the loan, for which the annual percentage rate (APR) shall not exceed 36 percent. The APR shall be calculated in accordance with Federal Reserve Board Regulation Z. Notwithstanding the federal definition of APR, for purposes of calculating APR, the finance charge shall exclude one application fee per borrower per year and one participation or membership fee per borrower per year.
II. For any open-end loan with a line of credit of $10,000 or less, a lender may lend in money, goods, or things of value upon such security not forbidden by RSA 399-A:11, VIII as may be agreed upon, and in connection with any such loan, may contract for, exact, or receive, directly or indirectly, charges, whether for interest, compensation, brokerage, endorsement fees, consideration, expense, or otherwise, on the entire principal of the loan, for which the APR shall not exceed 36 percent. The APR shall be calculated in accordance with Federal Reserve Board Regulation Z. Notwithstanding the federal definition of APR, for purposes of calculating APR, the finance charge shall exclude one application fee per borrower per year and one participation or membership fee per borrower per year.
369:3 New Paragraph; Provisions Applicable to Loans; Consumer Protection. Amend RSA 399-A:12 by inserting after paragraph VII the following new paragraph:
VIII. The commissioner shall have exclusive authority and jurisdiction to investigate charges, whether for interest, compensation, brokerage, endorsement fees, consideration, expense, or otherwise, and fees, whether for application, participation, insurance, debt cancellation, late payment, or otherwise, on small loans, payday loans, and title loans that are or may be unreasonable or an unfair or deceptive act or practice under RSA 358-A and exempt under RSA 358-A:3, I, or a violation of rules adopted by the commissioner. The commissioner may hold hearings relative to such conduct and may order restitution for any person adversely affected by such conduct.
369:4 Effective Date. This act shall take effect upon its passage.
Approved: July 23, 2010
Effective Date: July 23, 2010